Three dirty secrets underlie the debt-ceiling debate. First, the back-and-forth over competing proposals to cut $1.2 trillion, $2.7 trillion or $3.7 trillion misses the larger point. Depending on which baseline is used, the national debt is going to be somewhere in the neighborhood of $20 trillion in 2020.
Even cutting $3.7 trillion means a national debt of at least $16 trillion a decade hence. So such half-measures won’t actually solve the debt-ceiling problem. And that assumes a future president or Congress doesn’t disavow whatever deal is finally reached this week between President Barack Obama, Senate Democrats led by Majority Leader Harry Reid and House Republicans headed by Speaker John Boehner.
That brings us to the second dirty secret: Only one long-term debt-ceiling plan has been approved by at least one of the three major players; the Cut, Cap and Balance Act of 2011 passed the House in a bipartisan vote last week. The CCB raised the debt-ceiling $2.7 trillion, mandated $6 trillion worth of spending cuts and required submission of a balanced-budget amendment to the Constitution for consideration by the states.
Like it or hate it, the CCB is a concrete plan for avoiding default, getting federal spending under control and putting the federal government on the road to a permanent spending, taxes and debt settlement. The only other concrete plan to reach a vote? Obama’s 2012 budget proposal in February that was unanimously rejected by the Senate.
Everything else proposed has been nothing more than outlines, recommendations and concepts.
And that brings us to the third dirty secret: Obama and the Reid-led Senate Democrats are mainly serious about keeping the federal spending spigot wide open, which requires higher taxes.
Other than his 2012 budget proposal in February, Obama has put no concrete spending plan before the American people, and its been more than 800 days since Senate Democrats adopted a budget plan.
So nobody should be surprised that Obama’s response to Boehner’s agreement to $800 billion worth of closed tax loopholes and credits was to demand an additional $400 billion in taxes on individuals. That was the last straw for Boehner.
It seems clear the current debt-ceiling debate has reached its endgame. Boehner and House Republicans should therefore pass a short-term measure that includes at least the $1.2 trillion in spending cuts on which all parties have previously agreed, plus a debt-ceiling extension to Sept. 3, 2012.
That measure should be accompanied by a promise that the House will approve the Cut, Cap and Balance Act before Labor Day next year, allowing sufficient time for the Senate and president to also act on the measure.
Then Obama and the Democrats will have to make their choice and explain themselves to the American people in time for November’s election.